UAW forming local union for workers at VW's Chattanooga, Tenn., plant

Jul. 10, 2014

UAW President Dennis Williams, center, watches as Volkswagen Chattanooga employee Jonathan Walden signs the UAW charter at a news conference held Thursday, July 10, 2014, at the IBEW Local 175 in Chattanooga, Tenn., to announce the formation of a new local union in Chattanooga for Volkswagen workers. / Doug Strickland/Associated Press

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Detroit Free Press Business Writer

The UAW has formed a local union in Chattanooga, Tenn., to represent employees at the Volkswagen plant, the union’s latest step to represent workers who rejected it by a narrow margin in February.

Participation will be voluntary. The union will not have legal recognition from the German automaker until a majority of its workers have joined, the UAW said.

“We would fully expect that Volkswagen would deal with this local union if it represents a substantial portion of its employees,” UAW Secretary-Treasurer Gary Casteel said today. “It’s dependent on the employees and what they want to do.”

Casteel said the creation of Local 42 will avoid the need for another election that could involve “third-party interference.”

If the UAW can pull this off and VW recognizes the union, it would be the union’s highest-profile organizing victory in years and mark its first entry into an auto assembly plant in the South.

Although there is no formal recognition by VW, there is a consensus agreement between the company and UAW, Casteel said.

The extent of that consensus agreement remains unclear. VW denied it has a formal agreement with the UAW.

“Just like anywhere else in the world, the establishment of a local organization is a matter for the trade union concerned,” VW said in a statement. “There is no contract or other formal agreement with UAW on this matter.”

Members of the new local won’t have to pay union dues until it negotiates a contract with VW, Casteel said.

Some labor experts said the UAW’s decision is aimed at gaining representation over the long term. Others described it as a “public relations action.”

The UAW’s announcement comes as VW is close to deciding whether it will build a new crossover utility vehicle in Chattanooga or Puebla, Mexico.

In February, workers at the 3-year-old Chattanooga factory voted 712-626 against UAW representation. The UAW initially filed a challenge to that election with the National Labor Relations Board, arguing that Tennessee politicians and other interest groups interfered with the election. The union dropped the charge in April.

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“The election was so close, we don’t feel it’s right to turn our backs on these workers,” Casteel said.

Prior to the vote, the UAW agreed not to actively organize VW workers for a year if it failed.

However, the UAW has been talking with VW since the election about other ways to form a German-style works council. UAW President Dennis Williams has vowed that the union will not leave Chattanooga.

Kristin Dziczek, a labor expert at the Center for Automotive Research in Ann Arbor, said opening a local doesn’t violate the UAW’s earlier agreement with VW.

“Volkswagen doesn’t have to recognize the UAW. If they gain membership, then Volkswagen can enter into talks on workforce issues and they could recognize them,” Dziczek said. “Anybody can establish an organization and say if you want to join, you can join.”

Gary Klotz, a partner at Butzel Long who often represents management, noted that the union will not have any bargaining power.

“Opening a local when it represents no one amounts to a public relations action by the UAW,” Klotz said. “If employees join this local, the UAW would not represent them for collective bargaining purposes. So joining would be like joining a social club.”

VW continues negotiations with the State of Tennessee over incentives that would reduce the cost of expanding the Chattanooga plant where workers now make only the Passat sedan, sales of which fell 11% in the first half of this year.

It’s unclear whether today’s UAW announcement could affect discussions for the tax incentives, which must be approved by the Republican-controlled state legislature, which is heavily anti-union. Tennessee Gov. Bill Haslam’s administration wants to hear from VW about the latest development.

“It is most appropriate for the company to speak for itself on this issue,” David Smith, a spokesman for Haslam, told the Tennessean. “Our understanding is that there is no agreement between the company and the UAW.”